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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
Pend Oreille ) File No. EB-03-TC-123
Telephone Company ) NAL/Acct. No. 200432170001
) FRN: 0007838568
Apparent Liability for )
ORDER OF FORFEITURE
Adopted: October 13, 2004 Released: October 15,
By the Chief, Enforcement Bureau:
1. In this Order, we assess a forfeiture of $20,000
against Pend Oreille Telephone Company (``Pend Oreille'') for
willful and repeated violations of the Communications Act of
1934, as amended (``the Act''), and the Federal Communications
Commission's (``Commission'' or ``FCC'') rules and orders. For
the reasons set forth below, we find that Pend Oreille willfully
and repeatedly violated Section 214(e)(1)(B) of the Act,1 and
Sections 54.405(b) and 54.411(d) of the Commission's rules,2 by
willfully and repeatedly failing to publicize the availability
of Lifeline and Link-Up services ``in a manner reasonably
designed to reach those likely to qualify'' for the services.
2. The facts and circumstances surrounding this case are
set forth in the Notice of Apparent Liability
previously issued by the Enforcement Bureau
(``Bureau'') and need not be reiterated at length.3
Pend Oreille is an eligible telecommunications carrier
(``ETC''), i.e., a telephone company eligible to
receive universal service support under Section 254 of
the Act.4 Pend Oreille serves the Kalispel Reservation
in Usk, Washington. On October 7, 2003, based on
concerns raised informally with the Bureau by tribal
leaders, the Bureau sent a Letter of Inquiry (``LOI'')
to Pend Oreille,5 stating that it was investigating
whether Pend Oreille was satisfying its obligations
under Sections 54.405(b) and 54.411(d) of the
Commission's rules to publicize the availability of
Lifeline and Link-Up services to low-income residents
on tribal lands ``in a manner reasonably designed to
reach those likely to qualify'' for those services.6
The LOI directed Pend Oreille to describe any action it
had taken over the previous year to satisfy Sections
54.405(b) and 54.411(d) and to support its response
with pertinent documentation and affidavits. Pend
Oreille responded by saying it did not target any
particular group for Lifeline and Link-Up advertising
and attached a newspaper advertisement and a telephone
application insert, neither of which described its
Lifeline and Link-Up offerings.
3. Because the record reflected an almost complete failure
by Pend Oreille to publicize the availability of Lifeline and
Link-Up offerings, we found that Pend Oreille apparently
violated Section 214(e)(1)(B) of the Act, and Sections 54.405(b)
and 54.411(d) of the Commission's rules, and therefore proposed
a forfeiture of $25,000.7 In addition, we admonished Pend
Oreille for failing to comply with a Bureau directive to provide
certain information and documents.8
4. In its response to the Pend Oreille NAL, Pend
Oreille argues that no forfeiture should be imposed because: 1)
it publicized the availability of Lifeline services in its
telephone directory, local newspaper, and telephone application
insert; 2) it is able to demonstrate tangible outreach success
because 55 percent of the impoverished households on the Kalispel
Reservation receive Lifeline discounts; 3) it was working without
the benefit of Commission guidelines; and 4) it did not act with
bad intent and has a record of complying with Commission rules
and the duties of an ETC.9 We address Pend Oreille's arguments
in turn, and conclude that none of Pend Oreille's arguments
warrant cancellation of the proposed forfeiture amount.
5.Pend Oreille argues that its LOI Response indicated that
it advertised the availability of Lifeline and Link-Up services
to low-income residents on tribal lands via local newspaper ads
and in applications for telephone service.10 We disagree. The
newspaper ad and application insert submitted with Pend Oreille's
LOI response set forth the company's rates for basic service and
describe those services under general headings entitled, for
example, ``Touch Tone Service,'' ``Toll Blocking,'' and
``Emergency 911 Services.''11 One such heading, ``Toll
Restriction Services'' states that toll blocking is offered at no
charge ``to low-income customers participating in the Lifeline
program'' and directs interested persons to ``contact your local
Health and Welfare office.''12 This passing reference in the
newspaper ad and application insert, focused on toll blocking
capability, provides no information about the nature of Lifeline
service (i.e., that Lifeline is a program assisting low income
households with monthly telephone bills). Indeed, readers may
not even notice the vague reference to Lifeline service, let
alone have any incentive to call a Pend Oreille customer
representative or consult with a social service agency to inquire
about Lifeline service. Furthermore, the newspaper ad and
application insert make no mention of Pend Oreille's Link-Up
service offering. Thus, we conclude that Pend Oreille's claimed
outreach efforts via newspaper advertisements and telephone
service applications to low-income individuals fail to satisfy
its outreach obligations.
6.Pend Oreille also argues that its LOI Response indicated
that it advertised the availability of Lifeline and Link-Up
services to low-income residents on tribal lands in its telephone
directory.13 However, Pend Oreille fails to provide, either in
its response to the LOI14 or its response to the Pend Oreille
NAL,15 a copy of the relevant directory pages. Further, Pend
Oreille fails to describe exactly how its directory advertised or
explained the Lifeline or Link-Up programs. To the extent that
the directory pages refer to Lifeline and Link-Up in a manner
consistent with Pend Oreille's newspaper ads and application
inserts discussed above, we would conclude that Pend Oreille's
telephone directory did not sufficiently describe the Lifeline or
Link-Up programs. Without having the opportunity to review the
directory pages or the relevant language from the directory, we
are not persuaded that the directory adequately advises consumers
of the availability of the Lifeline and Link-Up programs.
Moreover, even assuming that Pend Oreille did describe the
availability of the Lifeline and Link-Up programs in some fashion
in its telephone directory, we are not convinced of the
reasonableness of this method of outreach.16 Based on the
forgoing, we conclude that Pend Oreille has not demonstrated that
it fulfilled its obligation to reasonably advertise Lifeline and
Link-Up through its directory pages.
7. Pend Oreille additionally states that it trained its
customer representatives to discuss the Lifeline and Link-Up
programs with prospective customers who may inquire as a result
of its ads and telephone applications, and that it coordinated
with the local health and welfare office to commence service to
qualified applicants.17 As noted above, however, because Pend
Oreille's ads and applications fail to provide any description of
Pend Oreille's Lifeline and Link-Up offerings, we fail to see why
interested potential Lifeline and Link-Up customers would either
call Pend Oreille or contact a welfare office to inquire as to
these discounted services. This commitment to respond to
inquiries is not sufficient to satisfy Pend Oreille's affirmative
obligation to publicize the availability of Lifeline and Link-Up
services. Further, Pend Oreille fails to provide details or
evidence of any of its in-house training or coordination
8. Next, Pend Oreille argues that because 55 percent of the
impoverished Kalispel Reservation households receive Lifeline
discounts, it can demonstrate ``tangible success'' from its
publication of Lifeline and Link-Up services to low-income
consumers on the Kalispel Reservation.19 We disagree. First, as
described above, we find Pend Oreille's outreach so lacking that
any such success cannot reasonably be attributed to Pend
Oreille's efforts. Further, we note that Pend Oreille's analysis
is incomplete. While poverty levels may suggest the number of
individuals likely to qualify for the discount, eligibility
determinations for Lifeline and Link-Up service are based on
participation in various means-tested public assistance programs
that go beyond poverty levels.20 As a result, we find Pend
Oreille's argument unavailing.
9. Pend Oreille further argues that a forfeiture should
not be imposed because Pend Oreille was working without the
benefit of Commission guidelines for outreach efforts.21 We find
this argument unpersuasive. While the Commission has not
mandated specific types of outreach for publicizing the
availability of Lifeline and Link-Up services to low-income
residents,22 because reasonable outreach may differ depending on
customer location,23 it has nevertheless provided sufficient
guidance for ETCs. In the Twelfth Report and Order, the
Commission required ETCs to identify communities with the lowest
subscribership levels within their service territories and make
``appropriate'' efforts to reach qualifying individuals within
those communities.24 The Commission further stated that, among
other things, it expected carriers to take into consideration the
cultural and linguistic characteristics of low-income communities
within their service territory, as well as the efficacy of
particular methods in reaching the greatest number of qualifying
low-income individuals within those communities.25 As an example
of effective outreach efforts, the Commission commended one
carrier for taking a proactive non-traditional means of
advertising in its service area by contacting low-income
households in person, speaking to individuals in their own
language, and explaining the Lifeline and toll blocking options,
rather than merely placing ads in regional publications or
putting up posters.26 Pend Oreille should have realized, based
on this guidance, that its virtually nonexistent outreach
efforts, i.e., embedding a vague reference to Lifeline in the
local newspaper and in application inserts, were not reasonable
methods of reaching qualifying low-income individuals on the
10. Pend Oreille also argues that a forfeiture should not
be imposed because it was not acting with bad intent.27 As we
noted in the Pend Oreille NAL, and reiterate here, Section
503(b)(1)(B) of the Act gives the Commission authority to assess
a forfeiture against a common carrier if the Commission
determines that the carrier has willfully or repeatedly failed to
comply with the provisions of the Act, or with any rule,
regulation or order issued by the Commission.28 For a violation
to be willful under Section 503(b), the carrier need not intend
to violate the rule. Rather, the carrier need only intend to
commit the act or omission in question.29 As a result, we do not
consider whether Pend Oreille acted with ``bad intent'' in
determining whether to impose a forfeiture.
11. Finally, Pend Oreille argues that a forfeiture should
not be imposed because it has a record of complying with
Commission rules and the duties of an ETC.30 In examining Pend
Oreille's assertion, Section 503(b) of the Act requires that the
Commission take into account, among other things, a history of
overall compliance in its consideration of downward adjustment of
a forfeiture.31 We note that the Commission has not in the past
taken enforcement action against Pend Oreille for violation of
the Commission's rules or its duties as an ETC. Accordingly, in
light of Pend Oreille's history of overall compliance, we reduce
the forfeiture by $5,000. We do not believe, however, that such
compliance warrants cancellation of the forfeiture. Thus, we
conclude that Pend Oreille is liable for a forfeiture in the
amount of $20,000.
IV. CONCLUSIONS AND ORDERING CLAUSES
12. After reviewing Pend Oreille's Response, we
find that Pend Oreille willfully and repeatedly failed to
publicize the availability of Lifeline and Link-Up services ``in
a manner reasonably designed to reach those who qualify'' for
those services. However, as discussed above, Pend Oreille has
shown mitigating circumstances sufficient to warrant a reduction
of the forfeiture penalty to $20,000.
13. Accordingly, IT IS ORDERED THAT, pursuant to
Sections 4(i) and 503(b) of the Act, 47 U.S.C. §§ 154(i) and
503(b), and Sections 0.111, 0.311 and 1.80(f)(4) of the
Commission's Rules, 47 C.F.R. §§ 0.111, 0.311 and 1.80(f)(4) that
Pend Oreille shall forfeit to the United States government the
sum of $20,000 for willfully and repeatedly violating Section
214(e)(1)(B) of the Act, 47 U.S.C. § 214(e)(1)(B), and Sections
54.405(b) and 54.411(d) of the Commission's rules, 47 C.F.R. §§
54.405(b), 54.411(d) as discussed in the paragraphs above.
14. Payment of the forfeiture must be made by
check or similar instrument, payable to the order of the Federal
Communications Commission, no later than 30 days after release of
this Order. The payment must include the NAL/Acct. No. and FRN
No. referenced above. Payment by check or money order may be
mailed to Forfeiture Collection Section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois
60673-7482. Payment by overnight mail may be sent to Bank One/LB
73482, 525 West Monroe, 8th Floor Mailroom, Chicago, Illinois
60661. Payment by wire transfer may be made to ABA Number
071000013, receiving bank Bank One, and Account Number 1165259.
15. IT IS FURTHER ORDERED that a copy of this
Forfeiture Order shall be sent by Certified Mail Return Receipt
Requested to Mark R. Martell, Assistant Manager, Pend Oreille
Telephone Company, 892 W. Madison Avenue, Glenns Ferry, ID
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
147 U.S.C. § 214(e)(1)(B).
247 C.F.R. §§ 54.405(b), 54.411(d).
3Pend Oreille Telephone Company, Notice of Apparent Liability for
Forfeiture, 19 FCC Rcd 9264 (EB rel. May 24, 2004) (Pend Oreille
447 U.S.C. § 254.
5See Letter of Inquiry from Colleen Heitkamp, Chief,
Telecommunications Consumers Division, Enforcement Bureau, to
Pend Oreille Telephone Company (Oct. 7, 2003) (``LOI'').
6Based on concerns that low-income residents on tribal lands may
not be aware of the benefits of Lifeline and Link-Up, the scope
of the investigation was limited to ETCs' efforts to publicize
Lifeline and Link-Up to eligible residents on tribal lands.
7Pend Oreille NAL, 19 FCC Rcd at 9268, ¶ 15.
8Id. at 9269, ¶ 20.
9Response to Notice of Apparent Liability for Forfeiture, filed
by Lukas, Nace, Guitierrez & Sachs, Counsel to Pend Oreille (June
23, 2004) (``Response'').
10Response at 2.
11Response to Letter of Inquiry from Colleen Heitkamp, Chief,
Telecommunications Consumers Division, Enforcement Bureau, to
Pend Oreille Telephone Company, filed by Mark R. Martell,
Assistant Manager to Pend Oreille Telephone Company (December 9,
2003) (``LOI Response'').
12LOI Response at Attachment.
13Response at 2.
14LOI at 4, question 6 (stating that supporting data should at a
minimum include copies of any written material used as
1547 C.F.R. § 1.80(f)(3) (stating that ``any showing as to why
the forfeiture should not be imposed or should be reduced shall
include a detailed factual statement and such documentation and
affidavits as may be pertinent'').
16 Indeed, in a recent order, the Commission noted that
``although advertising Lifeline/Link-Up in carriers' telephone
books may be effective in reaching some low-income individuals,
it will not be effective for those without established phone
service because carriers only distribute telephone books after
phone service is established.'' In the Matter of Lifeline and
Link-Up, Report and Order and Further Notice of Proposed
Rulemaking, 19 FCC Rcd 8302, 8327, ¶ 46 (2004) (Lifeline and
17Response at 7.
1847 C.F.R. § 1.80(f)(3).
19Response at 3-4.
20See 47 C.F.R. §§ 54.409, 54.415 which detail various
eligibility criteria for Lifeline and Link-Up programs. The
Commission recently modified the low-income Lifeline and Link-Up
program criteria to include an income-based eligibility criterion
and additional means-tested programs. See Lifeline and Link-Up
Order,19 FCC Rcd at 8308-14. However, we note that the
modifications in the Lifeline and Link-Up Order do not apply in
the instant proceeding because that decision became effective
after the period in question here.
21Response at 7.
22In the Lifeline and Link-Up Order, the Commission adopted
guidelines for ETCs to follow when publicizing the availability
of Lifeline and Link-Up to low-income residents on tribal lands,
but these guidelines are not applicable in the instant
proceeding. See id. at 19 FCC Rcd at 8325-29.
23See In the Matter of Federal-State Joint Board on Universal
Service, Twelfth Report and Order, 15 FCC Rcd 12208, 12250, ¶ 79
(2000) (Twelfth Report and Order).
26Id. at 12249-50, ¶ 77.
27Response at 6.
2847 U.S.C. § 503(b)(1)(B).
29See, e.g., Southern California Broadcasting Co., Memorandum
Opinion and Order, 6 FCC Rcd 4387 (1991).
30Response at 6.
3147 U.S.C. §503(b)(2)(D).